What Does a Post-Growth Economy Look Like?

No respectable person in American politics dares to question the virtue of economic growth even though it is increasingly clear that life on Earth will collapse if current patterns of extraction and consumption continue. So what is the responsible path forward?

It was exciting that the Institute for Policy Studies in Washington, D.C. decided to host a two-hour webinar to explore this topic two weeks ago. The dialogue – “A Deeper Look at the Limits to Growth: Looking Beyond GDP Towards a Post-Growth Society” – amounted to dipping a toe into the water rather than a confident plunge. But for Americans, who woefully lag behind European activists on this topic, it was a welcome attempt to get beyond conventional political stances.

Economic growth is always touted as the absolute precondition for greater social justice or environmental progress. Yet somehow growth never really translates into sustainable gains for the environment or fairer allocations of rewards. Nonmarket goals are always a receding chimera, an afterthought, a political football. On the other hand, it is equally true that criticizing economic growth is a sure-fire way to be politically marginalized in American public life. That's a real problem, too.

The IPS webinar sought to probe the “fundamental rift between traditional progressives over the future of economic growth. One segment argues that ecological limits dictate that the economic growth paradigm that we know is over…..Other progressives argue we should pursue growth policies -- or even ‘green growth’ -- and not concede that we are ‘anti-growth.’”

Here is how IPS introduced the webinar:

How do we move beyond the notion that green economists are tone-deaf to equity issues? How do we move beyond the misguided aspirations of many groups excluded from economic prosperity to grow the pie so they can have a larger piece of the pie? What is the green economist message to traditionally economically excluded constituencies?

Is there a way to “redefine growth” that doesn’t politically concede limits to growth? (After all, conventional wisdom say no politician will win on a degrowth program). Is there a common framework that can unify both of these movements that address both of these group’s deep systemic concerns?

In the past, organized labor and environmentalists have gamely attempted to find a common ground – a “blue/green alliance” – that would push for higher wages and stronger environmental protection at the same time. Such projects have been a valiant effort to force capital to internalize its negative externalities (pollution, habitat destruction, etc.) and allocate the benefits of growth more equitably.

However, such efforts have never achieved all that much. Organized labor has persisted in seeing economic growth as a necessary condition for improving its members’ standard of living. And environmentalists, with good reason, have persisted in trying to limit the extraction and consumption of natural resources – which is often seen as anti-labor. A deep unity has been elusive.

Peter Victor, an economist who studies environmental issues at York University, UK, argued the overwhelming case for ecological limits to growth. He noted that the material “throughput” of industrial economies has been increasing, but the capacity of the biosphere to absorb the waste has not; GDP (Gross Domestic Product) is far outpacing the ecological footprint of economic activity. Growing the economy at 3% per year over the next 100 years would mean that the economy would become 18 times larger, he said. The only way to prevent a corresponding increase of ecological harm would be for efficiencies to increase 18-fold as well, which is patently ridiculous.

Victor offered five arguments for the need to limit growth: the overwhelming evidence that the current economy is ecologically unsustainable; the increasing difficulty in finding low-cost fossil fuels, which means any future economic growth will have greater ecological impacts; the failure of economic growth to correlate to human happiness; the waning prospects of real economic improvements in “developing” economies; and the growing impact of market activity on many living species.

Ron Blackwell, the former chief economist for the AFL-CIO and UNITE, the textile workers union, agreed that both environmentalists and labor are failing in their respective missions and need to find better ways to work together. And he agreed that labor has traditionally seen economic growth as essential to increasing employment. Yet the post-2008 recovery has seen virtually no real growth in jobs or wages. While calling for greater solidarity between labor and environmentalists, Blackwell’s prescriptions were mostly for greater public funding for education, research and greener infrastructure. He also urged everyone to recast the growth discussion as “growth for what?” What exactly are we trying to grow?

Alas, I’m not sure if such “split the difference” approaches are going to get us where we need to go. It may ultimately come down to “which side are you on” – growth or post-growth? Will the argument for jobs and the environment be carried on within the “growth framework” – or can we begin to re-imagine the economy as something significantly different, something that escapes the growth compulsion? Can we imagine the economy as a subset of ecological systems, and begin to align human culture with the Earth’s inescapable needs as a living system?

David Korten, the author and activist, pointed out that the growth frame (falsely) assumes that technology can replace nature’s services. We need to shift our conceptualizion of “the economy” into a story of production integrated with the living system known as Earth, he said.

It is not exactly clear how to achieve this, however – although I think that the commons offers some helpful suggestions. To engage with an ecological commons is to develop a reciprocal relationship with nature; to focus on nonmarket, household needs rather than consumerism or for-profit gains; to focus on local needs rather than global market trade; and to nourish a different vision of human development than neoliberalism.

Juliet Schor, the Boston College sociologist who studies consumerism, work and the economy, argued that “we need to transcend the tradeoffs,” such as the alleged tradeoff between greenhouse gas emissions and human well-being. We cannot just “green the economy” as a sideline, she warned, if we are going to meet the 8 to 10% annual reductions in greenhouse gas emissions that scientists say wealthier countries must achieve to prevent runaway global warming.

Schor had some of the most compelling suggestions in the webinar. For example, focus on the local and regional as the space for real transformation. She also argued that we must begin to focus on sectoral improvements rather than broad macro improvements alone. The idea should be to “de-carbonize” energy, transportation and food production as distinct sectors of the economy.

Schor denounced neo-Keynesian economists as “a cargo cult” that still believes in “trickle-down effects” to improve social well-being while pursuing growth. That won’t work, she said. We need to “restructure bottom-up processes” if we are to transcend the tradeoffs and reinvent the economy.

Mateo Nube, an activist with Movement Generation, offered some excellent suggestions of his own. Instead of taking growth as the starting point of discussion, we need to move beyond the whole GDP discussion and re-focus on the original, core goal of economics – the management of “home.” If Earth is our home, how do we begin to regain control over its management from out-of-control global markets? Nube advised, We start by re-building our relationships to place, and regain our capacity to manage “home” (earthly resources) in reciprocal, democratic ways.

Unfortunately, this is precisely the conversation that neo-Keynesians, locked in an archaic framework of discussion, dismiss. They don’t wish to decentralize the economy, impede its global “efficiencies,” or integrate the many negative “externalities” of the economy into a new framework that would largely eradicate externalities.

I found it a depressing that some of the conventional commentators on the panel were so policy-oriented in their approaches that they had nothing to say about the role of democratic participation and innovation -- Internet-style -- as a promising space for transformation. The great strides being made by open design, hardware and manufacturing (cars, furniture, farm equipment, etc.) are a good example. Why can't subsistence agriculture and locally based fishing be fortified as more eco-sustainable alternatives to industrial farming and industrial fishing?

Mateo Nube noted that growth built on expansion always eradicates diversity because it is always expanding into territories occupied by others. Growth is always about homogenizing diversity by stealing from other countries, from nature and from living systems. “We have been moving from 6,000 languages to 500 languages, and from hundreds of banks in the world to about five mega-banks,” said Nube. “The only way to deal with the impact that the global economy has on place is to devolve power, resources and decisionmaking to a local, living economy that has autonomy.”

Getting back to the rift between organized labor and environmentalists, Nube said that we must recognize that “social inequity is a form of ecological imbalance.” The best way to address this problem is to restore our labor in relation to life systems, he said: Combine ecological restoration with social justice, and build a visionary, oppositional economy that entails translocal cooperation. The strategy should be used to displace the current system.

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